New £10k interest-free loan to help parents pay for childcare – but only if your employer signs up

PARENTS can borrow up to £10,000 interest free to help them pay for childcare in a new employee benefits scheme.

But in order to take advantage of the help, your employer must be signed up to it.

The Childcare Cash Advance Scheme works in the same way that many interest-free rail season ticket loans schemes do, which some employers already offer.

Parents with early years and school aged children can borrow the money upfront and pay it back over 12 months.

The loan is managed through Catapillr's online hub and can also benefit from a 20 per cent boost as it can be paid into the government tax free childcare scheme. This is where parents pay into an account with a childcare voucher provider, which the government then tops up.

The loan will help parents with irregular income meet the cost of childcare, particularly in situations where providers ask for more than a month's worth of fees in one go.

t's not a salary sacrifice scheme and the loans are repaid by regular deductions taken directly from a worker's net pay.

This means it won't affect Universal Credit payments as they are calculated on monthly gross pay.

Finance expert Kate Smith from Aegon warns that even though loans like this can be a "lifesaver" for some parents, they should also be treated the same as any other.

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article extract from The Sun

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